Tuesday, March 27, 2018

Fast Moving Consumer Goods (FMCG) Boom in Pakistan's $152 Billion Retail Market

Surging demand for fast moving consumer goods (FMCG) in Pakistan is attracting hundreds of millions of dollars of new investments. Expanding middle class, particularly millennials with rising disposable incomes, is demanding branded and packaged consumer goods ranging from personal and baby care items to food and beverage products.  Rapid growth in sales of consumer products and services is driving other sectors, including retail, e-commerce, paper and packaging, advertising, media, sports and entertainment. Planet Retail estimates Pakistan's current retail market size at $152 billion. It is forecast to expand 8.2% a year through 2016-2021 as average disposable income has doubled since 2010, according to research group Euromonitor International as reported by Bloomberg News.

New FMCG Investments:

Dutch consumer giant Unilever has announced plans to invest $120 million to expand its operations in Pakistan. Turkish multinational Hayat Kimya has said it will invest $150 million to manufacture consumer products in the country. Earlier in 2016, Dutch dairy giant FrieslandCampina acquired 51 % of Karachi-based Engro Foods Limited for $220 million.

Rapid growth in sales of consumer products and services is driving other sectors, including retail, e-commerce, paper and packaging, advertising, media, sports and entertainment.

Retail Sales:

Rising incomes of Pakistanis are reflected in the retail sales growth which is ranked the fastest in the world.  Planet Retail estimates Pakistan's current retail market size at $152 billion. It is forecast to expand 8.2% a year through 2016-2021 as disposable income has doubled since 2010, according to research group Euromonitor International as reported by Bloomberg News. The size of the middle class is expected to surpass that of the U.K. and Italy in the forecast period, it said.

Retail Sales Growth. Source: Bloomberg


E-Commerce:


Online sales are growing much faster than the brick-and-mortar retail sales. Adam Dawood of Yayvo online portal estimates that e-tail sales are doubling every year. He expects them to pass $1 billion in the current fiscal year (2017-18), two years earlier than the previous forecast. This is being enabled by increasing broadband penetration and new online payment options. Ant Financial, an Alibaba subsidiary, has just announced the purchase of 45% stake in Pakistan-based Telenor Microfinance Bank. Bloomberg is reporting that Alibaba is in serious talks to buy Daraz.pk, an online retailer in Pakistan.

Advertising Revenue:

Growing buying power of rapidly expanding middle class in Pakistan drove the nation's media advertising revenue up 14% to a record Rs. 76.2 billion ($727 million), making the country's media market among the world's fastest growing for FY 2015-16, according to Magna Research.  Half of this ad spending (Rs. 38 billion or $362 million) went to television channels while the rest was divided among print, outdoor, radio and digital media. `

Global Advertising Growth 2016. Source: Magna

Digital media spending rose 27% in 2015-16 over prior year, the fastest of all the media platforms. It was followed by 20% increase in radio, 13% in television, 12% in print and 6% in outdoor advertising, according to data published by Aurora media market research

Mass Media Growth:

Advertising revenue has fueled media boom in Pakistan since early 2000s when Pakistan had just one television channel, according to the UK's Prospect Magazine. Today it has over 100. This boom has transformed the nation. The birth of privately owned commercial media has been enabled by the Musharraf-era deregulation, and funded by the tremendous growth in revenue from advertising targeted at the burgeoning urban middle class consumers.

Sports and Entertainment:

Sports and entertainment sectors are major beneficiaries of increasing advertising budgets. Commercial television channels' shows and serials are supported by advertisers. A quick look at Pakistan Super League 2018 matches reveals that all major consumer brand names are either directly sponsoring or buying advertising from broadcasters.  These ads and sponsorship have turned PSL into a major business producing tens of millions of dollars in revenue to support cricket in Pakistan.  Last year, Pakistan Cricket Board's budget was over $40 million and a big chunk of it came from PSL. This year, the PSL chairman Najam Sethi estimates the PSL franchise valuation is approaching half a billion US dollars with potentially significant revenue upside.

Downsides of Consumer Boom:

There are a couple of downsides of the consumer boom. First,  a dramatic increase in solid waste. Second, rising consumption could further depress Pakistan's already low private savings rate.

FMCG products come with a significant amount of plastic and paper packaging that contribute to larger volume of trash. This will necessitate a more modern approach to solid waste disposal and recycling in Pakistani towns and cities. An absence of these systems will make the garbage situation much worse. It will pose increased environmental hazards.

Pakistan's savings rate is already in teens, making it among the lowest in the world. Further decline could hurt investments necessary for faster economic growth.

Summary: 

Pakistan's $152 billion retail market is the fastest growing in the world, according to Euromonitor.  Expanding middle class, particularly millennials with rising disposable incomes, is demanding branded and packaged consumer goods ranging from personal and baby care items to food and beverage products. Strong demand for fast moving consumer goods is drawing large new investments of hundreds of millions of dollars.  Rapid growth in sales of consumer products and services is driving other sectors, including retail, e-commerce, paper and packaging, advertising, media, sports and entertainment. Potential downsides of soaring consumption include increased amount of  solid waste and decline in domestic savings and investment rates.

Related Links:

Haq's Musings

Pakistan Retail Sales Growth

Advertising Revenue in Pakistan

Pakistan FMCG Market

The Other 99% of Pakistan Story

PSL Cricket League Revenue

E-Commerce in Pakistan

Fintech Revolution in Pakistan

Mobile Broadband Speed in Pakistan

21 comments:

waqar khan said...

Great to see positive projection of Pakistan based on solid data

Monis R. said...

I believe that soaring consumption and decline in domestic savings rate will increase demand of loan products. What are your views on this?

Riaz Haq said...

Monis: "I believe that soaring consumption and decline in domestic savings rate will increase demand of loan products. What are your views on this?"

Consumer debt in Pakistan is among the lowest in the world. There's a lot of room for consumer debt growth through mortgages, car loans, credit cards etc. But it requires greater financial inclusion. Hopefully fintech will help here.

http://www.riazhaq.com/2017/11/pakistans-fintech-revolution-to-promote.html

Riaz Haq said...

Pakistan economy accomplished a decent growth rate of 5.79% April 16 2018 09:07 PM

http://www.gulf-times.com/story/589222/Pakistan-economy-accomplished-a-decent-growth-rate

Maintaining a steady path and supported by an overall performance by key sectors, Pakistan’s economy has accomplished a decent growth rate of 5.79%, highest in 13 years since 2004-05 when it grew by 7.52%.
With the rate of inflation still below 4% in the first nine months of the current fiscal year, this high-growth-low-inflation scene can be compared to a text book description of an economy at the take-off stage unless rising external vulnerabilities revert back to a crash landing and need for stabilisation during the upcoming political transition.
Some critics may still like to highlight slippages on some targets including the GDP growth target itself 5.79% growth instead of the 6% target – and a particularly lower than anticipated output by the industrial sector.
Yet it is heartening that the agriculture and services sectors performed better than targeted. This in fact partly compensated for the industrial sector’s growth.
Most of the numbers approved by the National Accounts Committee for GDP performance are subject to the usual revision based on availability of actual numbers for the entire fiscal year.

--------------

The rise in production of three important crops namely rice, sugarcane and cotton was estimated at 8.7%, 7.4%, and 11.8% respectively. On the contrary, decline in production, although provisional, was estimated at 4.4% for wheat crop and 7.1% for maize.
Together, important crops posted a healthy growth rate of 3.57% against 2% target while other crops increased by 3.33% against 3.2% target. Cotton ginning also contributed significantly with a 8.72% growth rate compared to 6.5% target and last year’s growth of 5.6%. With 3.76% growth, livestock was close to 3.8% while forestry sub-sector stayed far behind the 10% target at 7.17% – almost half the 14.5% growth delivered last year.
On the whole, the industry is estimated to have grown 5.8% against a target of 7.3% and revised growth of 5% last year. Here the manufacturing showed a 6.24% growth instead of the targeted 6.4% and 5.3% growth last year.
Large scale manufacturing posted a 6.13% growth, slightly below its 6.3% target but much better than last year’s 5% increase. Major contributors to this growth were cement (12%), tractors (44.7%), trucks (24.41%) and petroleum products (10.26%).
Construction, another priority sector of the current government, also increased by 9.13%, against 9% increase last year, and missed by a wide margin the target of 12.1%.
The major contribution to 5.79% GDP growth rate came from 3.85% share from the services sector. The remaining 1.94% share to GDP came from industrial sector (1.21%) and agriculture (0.73%). The services sector has achieved 6.43% growth during current fiscal year second year in a row to have achieved above 6% growth but was primarily driven by general government services aka salary increases, inflation and other public sector expenditures.

Riaz Haq said...

Report finds sharp decline in Pakistan’s pulse consumption

https://www.dawn.com/news/1400488

The consumption of pulses in Pakistan has sharply declined from about 15kg per person a year to about 7kg per person a year, found a new report of the Food and Agriculture Organisation (FAO) of the United Nations.

The report titled ‘State of Food and Agriculture in Asia and the Pacific Region’, reviewed pulse consumption in Pakistan, India, Sri Lanka and Bangladesh over the period from 1961 to 2013. It has been prepared for the FAO regional conference for Asia and the Pacific being held in Fiji on April 9-13.

The report found that as countries became richer, populations were shifting from vegetable proteins — such as those found in pulses and beans — to more expensive animal source proteins such as those found in dairy products and meat.

In India, during this period, the consumption of pulse declined from about 22kg per person in a year to about 15kg per person per year. The decline was consistent with trends elsewhere in the world. In Sri Lanka, however, pulse consumption seemed to have fluctuated between 5kg and 10kg per person per year since 1960, except for a sharp drop from 1970 to 1985, the report said.

Pointing out challenges, it emphasised that the relative neglect of pulses, beans and other crops in agricultural policies in the region should be reversed so that the poor had relatively low-cost sources of protein and other micronutrients.

The report pointed out that although overall cereal consumption per capita either declined or remained constant, within the cereal group itself there were important changes. Utilisation of rice and wheat for food increased — in some cases sharply — while total food utilisation of coarse cereals, which had been relatively important in the 1960s, either declined or remained steady, implying a fall in per capita consumption since the population was increasing.

Citing example, the report said in East Asia rice and wheat utilisation for food was about 220 million tonnes per year in 2015, versus 20m tonnes per year for coarse cereals.

Total utilisation of ‘superior’ cereals was still rising in 2013 mainly because of continuing population growth, even though per capita utilisation had started declining from the mid-1990s onwards, it added.

The report put four South Asian countries — Bangladesh, India, Pakistan and Sri Lanka — below the red line, indicating that their calorie consumption was below the level that would be expected given their per capita household expenditure.

Riaz Haq said...

FAO Report for Asia Pacific Region 2017:

Asia and
the Pacific
REGIONAL
OVERVIEW OF
FOOD SECURITY
AND NUTRITION

In 2011-2013, only two (Mongolia and Pakistan) of the 26 countries had average intake of milk of 370 g/day or over.

---------------

In Pakistan,
the Credit Guarantee Scheme for Small and Marginalized
Farmers became operational in 2016, encouraging banks
to grant credit to small-scale farmers who previously lacked
access. Under the scheme, the government guarantees up
to 50 percent of loans to small farmers (i.e. those with less
than 5 acres of irrigated and 10 acres of non-irrigated land).

----------------------

In South Asia, production outcomes improved for some
countries. Pakistan had a bumper wheat harvest in 2016
and other crops also performed well due to favourable
weather. In India as well, cereal production recovered
markedly after two consecutive bad seasons. In some other
cases in South Asia – e.g. Sri Lanka – governments managed
to maintain aggregate food supply either through imports
or by drawing down stocks where available despite declines
in cereal production.

-----------



http://www.fao.org/3/a-i7930e.pdf

Riaz Haq said...

#Pakistan '#GDP rate rose to 5.8% in FY17-18': Pakistan's #economy grows at fastest rate in 13 years. Large Scale #Manufacturing up 6.13%. #Agriculture grew at a rate of 3.81%, while #industries and #services grew 5.8% and 6.43% respectively.

https://www.dawn.com/news/1403805/gdp-grew-58pc-in-fy17-18-ahsan-miftah-unveil-pakistan-economic-survey

"Energy, economy, elimination of extremism and education were the 'four Es' that we had discussed in our manifesto," Ahsan Iqbal said.

"We created two plans ─ one was an immediate plan, the other was our Vision 2025," he explained.

The PML-N government faced "major constraints and bottlenecks as a development framework was not present," he said.

Despite this, the government had, over the last five years, allocated Rs47 billion to higher education, built 1,750 kilometres in motorways, and added 11,000 MegaWatts to the power grid.

"We provided energy to industries so that the economy could grow. Record demand has been generated from [an increase in] energy in Pakistan."

"The China-Pakistan Economic Corridor is a reality today. Of a total investment of $46bn, $39bn is being used to build roads and infrastructure."

"We have used our own budget to curb terrorism, financing Operations Zarb-i-Azb and Raddul Fasaad," he said.

Miftah Ismail said the government couldn't "possibly have given a budget for just three months."

"What were we supposed to do? Raise salaries for three months, tell India to stop LoC firing for three months, and reduce taxes for three months? That is not how economics works. If we were to do this, it would have been a disservice to our country and we would not have been doing our jobs," he said.

"The day the next government comes, it it has the right to change whatever it wants in the budget. Also, Ahsan Iqbal has left a Rs100bn block for the next government to spend on development as they please. 95pc of the same expenditures are faced by every government. Each government has to pay salaries and so on," he said.

"You will see that all provinces will give their budget too, even though they are busy playing politics on the matter at the moment," Ismail added.

Iqbal said: "The provinces have to give a budget that is based on expenditures. They are given revenues which mostly come from the federal government. The federal government has to define the country's economic policy for the next year. Through this, the industrialist decides the cost of production. How can we leave them without a budget?"

The gross domestic product (GDP) grew at a rate of 5.8 per cent over the past year, Iqbal revealed, narrowly missing the PML-N's manifesto target of at least 6pc.

"We would have achieved 6.1pc without political turmoil," he explained. "This is compared to an average of 3pc GDP growth" before the PML-N came to power in 2013.

The momentum of growth remained above 5pc for the last two years running, reaching a 13-year high of 5.8pc in FY17-18 on the back of "strong performance in the agriculture, industrial and service sectors", Iqbal said.

Agriculture grew at a rate of 3.81pc, while industries and services grew 5.8pc and 6.43pc respectively, he announced.

The agri sector, saw the highest growth over the last 13 years, Iqbal said, explaining that the growth was achieved "on the back of initiatives such as expansion in credit to the sector, along with the Kissan Package, provision of better quality seeds including hybrid and high-yield varieties, and timely availability of agriculture inputs such as fertiliser, pesticides, etc."

Riaz Haq said...

Hair Removal Ad Makes Pakistani Women Go 'Wow' — But Not In A Good Way

https://www.npr.org/sections/goatsandsoda/2018/04/26/606013690/hair-removal-ad-makes-pakistani-women-go-wow-but-not-in-a-good-way

On the face of it, it was just another hair removal ad aimed at women in both Pakistan and India But this ad, like the others, would have slipped by unnoticed were it not for a social media uproar led by none other than Sana Mir, the former captain of the Pakistan women's cricket team.

First uploaded on the product's YouTube channel on April 5, the ad for Veet Perfect Silk hair removal cream shows Pakistani actress Mahira Khan slinking onto a basketball court on a college campus. Even though she's wearing a tight pink dress and high heels, she handles the ball with ease and sinks it into the basket. As she accomplishes this feat, her arm brushes up against one of the other players, in athletic garb, who declares "wow" and then exclaims breathlessly, "So smooth!"

"Not smooth," replies Khan. "Perfect!"

Skin lightening and hair removal creams are some of the subcontinent's best-selling products, playing on the familiar insecurities South Asian women share on both sides of the border about body hair and the color of their skin. But when Sana Mir commented on the ad in a Facebook post on April 22, her post went viral — shared over 700 times from her official page and liked 28,000 times at last count.

Mir opened her statement with a strong salvo: "To all young girls out there who aspire to take up sports. Make no mistake: you need strong arms, not smooth arms, on a sports field." She related how she'd refused to endorse similar beauty products because they objectify women "in different professional settings." Because this one involved sports and was clearly aimed at a younger crowd, Mir decided to speak up.

"The worst thing is that instead of sending a message to young girls that the colour or texture of their skin does not matter, we are promoting body shaming and objectification," Mir wrote. She ended her post by requesting companies and the celebrities who endorse products to try and give girls the confidence to fulfill their dreams rather than making them feel self-conscious about their bodies.

Both Indian and Pakistani women reacted enthusiastically to Mir's post, which she paired with jubilant images of the Pakistani women cricket's team performing on the field. Women called her a strong role model and bemoaned the pressure that women feel to look "perfect", thanks to advertisements for beauty products like these. Others lauded her for refusing sponsorship deals in the name of resisting body-shaming. "You're a real hero for refusing to compromise on values for sponsorship money," said Shahbano Aliani, from Karachi.

Mir's protest comes at a time when Pakistani women are becoming increasingly aware of the sexism that keeps them in a position of lesser status. But there has been backlash. Some media painted Mir's statement as "slamming" Mahira Khan, predictably pitting two of Pakistan's most recognizable celebrities against each other.

Riaz Haq said...

PSL 3 brings $5 million profit for PCB, more than double of 2nd editions says Najam Sethi
The PCB chairman has reported massive profits from the recently-concluded PSL.

https://www.crictracker.com/psl-3-brings-5-million-profit-for-pcb-more-then-double-of-2nd-editions-says-najam-sethi/


The Pakistan Cricket Board successfully completed the third edition of the Pakistan Super League with the eliminator and the finals of the tournament in two cities of Pakistan. Through the Pakistan Super League, the PCB is trying to bring back cricket to its soil which has been stranded ever since the attack on Sri Lankan players.

Najam Sethi, the chairman of Pakistan Cricket Board (PCB) says that the tournament has been a massive success and the board is expecting to earn a revenue of around five million US dollars. Sethi was speaking to media after attending a meeting said that the third edition was bigger and better. According to Sethi while the 2nd edition brought them $2 million, the 3rd edition will give them around $5 million profit. “This time around [in the third edition], we are expecting over five million dollars as profit,” said the PCB chief.

Most matches of PSL 4 will be held in Pakistan: Sethi
Sethi has already announced that most of the matches of the 4th edition of the tournament will be held in Pakistan. “You should trust me. I do what I say. Have finished one good news and am now giving the second,” he had said ahead of the PSL 2 final in Karachi.

He also talked about the ongoing tussle with BCCI and said that they have already initiated the process of dispute resolution against the BCCI and they’re hoping to get it resolved soon. ICC has already created a 3-member bench to look into the matter.

Sethi also spoke about the selection of the Pakistani squad for the tour of Ireland and England. The cricket fans in Pakistan are venting their anger over the exclusion of Fawad Alam from the squad. Sethi said that he never interferes in the selection process. He said that selection committee is fully independent and they have professionals to take correct decisions.

Riaz Haq said...

The dawn of advertising in Pakistan (1947-2017)
AURORA
THE 21ST CENTURY: THE AGE OF THE MILLENNIAL
HARMONISE OR GO BUST


https://www.dawn.com/news/1398497


WILL MAINSTREAM AGENCIES SURVIVE THE ONSLAUGHT OF BIG TECH COMPANIES?
In the digital advertising space, business models for creative agencies are under increasing threat due to the entry of the big technology companies, says Amin Rammal.

An Agency of Record (AOR) is commonly defined as an advertising agency authorised by an advertiser to buy advertising space and/or time on its behalf (businessdictionary.com). While this is still relevant from a media buying perspective, the adaptation of this concept in the creative, strategy and execution space may not be so intuitive in a digitally-driven, highly fragmented communications environment.

The relevance of an offering (AOR or any other relationship) depends on what the customer (advertiser) needs. The traditional agency model was a strategic partner relationship with the advertiser to manage their brand communications providing strategic planning, creative idea generation, production, execution and media planning and buying.

The AOR has been a prerogative of multinationals and large national clients. In Pakistan, multinationals adopt brand strategies developed at the global or regional level, with an aligned AOR. Major thematic campaigns are beginning to move in a similar direction, where the trend is towards global and regional creative.

So the selection of AOR agencies by multinational clients is based on regional or global agency alignment. The local agency affiliate is more execution or tactical focused. It is unlikely that this will change in the near future as multinationals are able to better synchronise and manage cost with globally or regionally aligned AORs.

Very few local advertisers invest in strategic planning and the focus tends to be more on execution. In many cases, large local advertisers appoint AORs, but the selection is often driven by price or triggered by new decision-makers in the marketing department. They also tend to maintain flexibility by keeping a roster of execution agencies.

In Pakistan, similar to the rest of the world, media planning and buying has become a specialised area thanks to the advent of media buying houses. Whether an advertiser selects a full-service agency or a media buying house to plan or buy media, economies of scale support the consolidation of media buying to a single or few entities. Hence the support for AOR in case of media, continues to stand for now.

However, some media buying houses are offering creative services, particularly in the content area, by partnering with content producers or smaller creative agencies. While they act as a single AOR for the advertiser, they are forward integrating with smaller entities and freelancers.

There are different permutations of AORs when dealing with specialist areas such as mass media versus digital, versus PR, versus activation. The decision is driven by the advertiser’s legacy system, the organisational structure and capabilities, the agency’s offering in the marketplace (full-service versus specialisation) and the cost structures of the industry.

Although in the short term, the AOR model seems to be working in Pakistan with different variations, the debate brewing globally is will the concept of AOR continue as digital’s share of advertising grows? The answer depends on several factors.

Riaz Haq said...

#HongKong’s #retail chain Cheong Hing plans to enter #Pakistan. Founded in 1960, the company's line of businesses include retail sale of home-furnishings such as china, glassware, and metal-ware for kitchen and table use.

https://www.thenews.com.pk/print/340032-hong-kong-s-retail-chain-plans-to-enter-pakistan

Hong Kong-based companies including a retail chain store planned to enter Pakistan following a bilateral treaty signed between the two countries last year to avoid double taxation that may boost annual foreign direct investment inflows from approximately $35 million, officials said on Tuesday.


Officials at Trade Development Authority of Pakistan (TDAP) said Cheong Hing Limited intends to set up retail chain stores in Pakistan and currently in talks with different stakeholders. Founded in 1960, the company's line of businesses include retail sale of home-furnishings such as china, glassware, and metal-ware for kitchen and table use.

Pakistan has witnessed arrival of some global retailers in the past few years, but local businesses still dominate the retail sector. Wholesale and retail trade accounts for around 20 percent of the country’s economy of $300 billion, according to the State Bank of Pakistan.

Analysts said liberal FDI policy for retailing along with changing buying habits would continue to provide enough opportunities to global retailers to explore Pakistan’s market for any investment and expansion plan. New chains of grocery and lifestyle stores are likely to enter primarily in urban centres, while chains of retail outlets irrespective of channel are likely to continue expand their network.

Late last year, Pakistan and Hong Kong ratified a treaty to stave off double taxation on incomes of their individuals and companies. TDAP officials said Hong Kong’s Aalpes Global Group, which is in the business of creative planning, intends to set up company in Pakistan to expand business technology.

An official said Pakistan’s mission in Hong Kong is building its connection with the Securities and Exchange Commission of Pakistan. Besides, Sino-German Safety Science and Technology Industrial Park Company intends to study information technology market, and is already in talks with the local stakeholders.

Pakistan is one of the most liberal foreign investment regimes in South Asia with 100 percent foreign equity permitted in the manufacturing and infrastructure development sectors. The country offers a number of tax incentives to FDI projects in several sectors, spanning infrastructure, electronics and information technology and telecommunication services. Hong Kong’s FDI flow to Pakistan was recorded at $34.5 million during the July 2017 to February 2018 period.

Riaz Haq said...

Pakistan #digital #media a threat to broadcast industry. Digital media will soon be replacing broadcast media in #Pakistan. Pak digital media credited for taking up issues that are not covered by #broadcast or #print media which adhere to different rules. https://www.asiatimes.com/2019/04/opinion/pakistans-digital-media-a-threat-to-broadcast-industry/

Last year, one of Pakistan’s most watched television news channels, Waqt News, shut down, citing financial reasons. Tribune 24/7, an English-language news channel owned by Express Media Group, one of Pakistan’s largest media conglomerates, fired more than 100 employees and shut down in a similar fashion. The fact that two news channels owned by two of Pakistan’s most well-established media groups shut down abruptly was a warning sign that more channels might shut down in the future and that digital media are set to replace Pakistan’s broadcast-media landscape.

However, what really frustrated Pakistan’s broadcast industry was when emerging digital-media outlets got the opportunity for an exclusive press conference with Finance Minister Asad Umer. This did not sit well with broadcast journalists, and they criticized the press conference and referred to digital-media journalists as “social-media activists” and “Asad Umer’s social-media team” among other things.

But their frustration was not actually regarding being unable to score an important press conference, but the fact that digital media are the future and will soon be replacing broadcast media in Pakistan. The broadcast media are engaging in an “us vs them” debate as described by the website Bolo Jawan, which commented that they are being threatened by the rising trend in digital media and, because of the financial crunch in the country, when it comes to the broadcast-media landscape, things do not look promising.

Pakistan’s digital media are credited for taking up issues that would not be otherwise covered by broadcast or print media as they adhere to different rules. This does not necessarily mean that the digital media are entirely free from restrictions, as attacks on journalists and those associated with the media are common and digital media do not get any special privileges either. Despite that, Pakistan’s digital media have touched upon topics that have often been considered taboo, such as the debate regarding the blasphemy law, normalizing relations with Israel and LGBTQIA rights. This has not saved digital media from any criticism, since Pakistan is a highly conservative country religiously and culturally, but debates regarding such topics are something the digital media need to be credited for.

There were about 44.6 million Internet users in Pakistan in 2017, with an Internet penetration rate of 21.8%. Those numbers are expected to rise in coming years. It might look like a dark future for the state of the broadcast industry, but in order to keep up with the rising trend of digital media, broadcasters must quickly immerse themselves in the country’s digital-media landscape, as print did when broadcast media were a new phenomenon. The broadcast industry does possess the resources to do so, but if it fails to take steps, people serving in that industry will suffer, and no amount of criticism of digital media will be able to save them.


Riaz Haq said...

#Carrefour’s #ecommerce service to be launched in #Pakistan in 2020. Carrefour is already running e-commerce platforms in 10 of 14 countries it operates in. It's 7 #supermarkets in #Karachi, #Lahore, #Islamabad, #Faisalabad https://www.brecorder.com/2019/06/21/504665/carrefours-e-commerce-service-to-be-launched-by-next-year//

BR Research: It has been ten years since Carrefour came to Pakistan. Please walk us through the journey so far.

Gyu Taeg Kim: I’d like to start off with an introduction of our group Majid Al Futtaim which is the leading shopping mall, communities, retail and leisure pioneer across the Middle East, Africa and Asia. Majid Al Futtaim holds the exclusive franchise rights to operate Carrefour in 37 countries and currently operates over 270 Carrefour stores in 15 countries. The recently announced Uganda market will be its 16th country.

Majid Al Futtaim opened its doors in Pakistan in 2009 by starting the first of its kind hypermarkets in the country called Hyperstar. Pakistan has immense potential and has a young dynamic population with an average age that is amongst the lowest in the world. The adaptation of the younger generation is much faster when it comes to embracing new retail channels. When I started off as Country Manager in January 2016, we were operating only two stores with one in Lahore and the other in Karachi. Since then it has grown to 7 hypermarkets and one supermarket with presence in Islamabad and Faisalabad as well.

In December 2018, Hyperstar was re-branded to Carrefour by Majid Al Futtaim across Pakistan. This year marks our tenth anniversary in Pakistan and since then, Majid Al Futtaim has invested Rs8 billion in Pakistan and has created 7000 jobs both directly and indirectly. We plan on providing employment to an additional 2000 people every year on the back of our expansion plans.

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BRR: What about future expansion plans?

GTK: Generally, we remain open to opportunities that will enable us to grow our footprint. We will focus on tier-2 cities in the next phase and plan to open stores in Gujranwala, Hyderabad and Multan within the next two years.

BRR: The footprint of Imtiaz Supermarket and the Al-Fatah group is growing rapidly in the supermarket segment. How do you view this competition?

GTK: The retail space in Pakistan enjoys healthy competition, which we embrace. While other retailers focus on very specific customer segments, i.e. mainly high-end customers or customers with lower spending power, categorized as C&D customers, Carrefour is able to cater to a wide variety of customer segments by offering an unbeatable choice, quality and value at the best price. At our hypermarkets we deliver a best in class shopping experience to our customers and create great moments for them every day. Our main business is consumer goods and fresh produce and in fact more than 70 percent of our total turnover is generated by these two categories.

BRR: How much is Carrefour’s market share in the modern trade space in Pakistan compared to its competitors?

GTK: In Pakistan, 20 percent of the total retail sector is modern trade, which was roughly 12 percent back in 2013. In the modern trade space, we have one of the top market shares. But if I consider it from the end consumer perspective, then we are number one followed by our local competition. We are occupying 30 percent and the remaining percentage is divided amongst our local competitors and other medium sized players.

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BRR: You mentioned that the majority of Carrefour’s revenue comes from consumer goods and fresh produce. Are you investing in the local value chain for these items?

GTK: We have increased direct purchasing from farmers and are ensuring guaranteed procurement in order to sustain prices for basic items throughout the year. The impact of Carrefour extends beyond millions of customers, to more than 700 suppliers and partners across Pakistan. This includes local farmers, manufacturers and producers.

Riaz Haq said...

Shan Foods considering sale of majority stake valued at about $250 million. Possible buyer Unilever Foods Pakistan's net sales rose 7% to 9.6 billion rupees ($62 million) for the first nine months this fiscal year. #Pakistan #FMCG #food https://www.bloomberg.com/news/articles/2019-11-06/pakistan-s-shan-foods-is-said-to-consider-sale-of-majority-stake via @business

Shan Foods Pvt. is considering the sale of a majority stake that could value the Pakistani spice maker at about $250 million, according to people familiar with the matter.

The company is working with a financial adviser on the sale and has approached potential buyers including Unilever Plc., said the people said, who asked not to be identified as the discussions are private.

A deal would give potential acquirers exposure to the world’s sixth most populous nation that was the fastest retail market globally until an economic crisis recently. The nation is looking to stabilize its economy after securing a $6 billion bailout from the International Monetary Fund.

Deliberations are ongoing and Shan Foods can still decide to sell a non-majority stake or keep the business, the people said. Representatives for Shan Foods and Unilever declined to comment.

Shan Foods, founded in 1981, is known for its small boxes with spices and recipe mixes that are used in South Asian cooking, according to its website. Its products are available in 65 countries, the website shows.

Among measures to revive the economy, Pakistan discourages consumer good imports that makes it a boon for local manufacturers including Unilever’s operations there. Unilever Pakistan Foods Ltd.’s net sales rose 7% to 9.6 billion rupees ($62 million) for the first nine months this year, according to the company’s website.

Riaz Haq said...

#Pakistani fresh produce company announces a move into #retail with its new Go 4 Fresh stores that will stock local and imported #fruits and #vegetables, #smoothies, fresh #milk, synthetic ingredient-free ice cream, fresh fruit juices and dried fruits. http://www.fruitnet.com/asiafruit/article/180513/retail-revelation-for-iftekhar-ahmed-co-

Leading Pakistani grower-packer-exporter Ahmed & Company (IAC) has announced it will enter the retail market with a new fresh produce retail chain called Go 4 Fresh.

The stores will stock local and imported fruits and vegetables, smoothies, fresh milk, synthetic ingredient-free ice cream, fresh fruit juices and dried fruits.

This announcement was accompanied by the launch of a new brand also called “Go 4 Fresh” which will be available in both domestic and foreign markets. IAC plans to launch a range of fresh and value-added products under this brand, which will be exported to IAC’s established foreign markets spread over 30 countries.

The first Go 4 Fresh store is located in Karachi and will be formally opened on 21 December. IAC plans to open between eight and ten more stores across the city and then expand across the rest of the country.

Following this, the company will look at opening stores in the Middle East and the UK.

Waheed Ahmed, director, marketing of IAC, said these stores will benefit both consumers and growers in Pakistan by helping the local market meet the changing lifestyle requirements of the people of Pakistan.

“The company believes in giving back and in re-investing its earnings in the society to create greater employment,” Ahmed said.

“This is the right time to invest in Pakistan as the country needs revenue and employment to get out of its economic downward spiral.”

Riaz Haq said...

The changing world means changing spending patterns and living habits at home as well as abroad. Pakistan is now the world’s fastest-growing retail market, partly thanks to the fact that disposable income has doubled since 2010. The number of retail stores, which is forecast to rise by 50 per cent between 2017 and 2021, is also being driven by the two-thirds of the populace under the age of thirty—and by the changing attitude to money among the young, who want to enjoy a good lifestyle now rather than save to enjoy one later.

Frankopan, Peter. The New Silk Roads (pp. 14-15). Knopf Doubleday Publishing Group. Kindle Edition.

Water is also a problem in South Asia, where India’s construction of the Kishanganga dam and hydroelectric plant has been a source of great concern for the government of Pakistan, who argue that these projects violate the treaty of 1960 that split the water resources of the Indus River between Pakistan and India. Anxieties about the dam, which was formally opened in May 2018, have been heightened by proposals to build as many as twelve hydroelectric plants on the River Kabul in Afghanistan—which would put further pressure on the resources of cities like Karachi, whose population is growing at more than 5 per cent per year and whose water board is only able to supply 50 per cent of its needs as it is.43 Not surprisingly, the Kishanganga

Frankopan, Peter. The New Silk Roads (p. 37). Knopf Doubleday Publishing Group. Kindle Edition.

dam has been referred to the International Court for Arbitration, and, perhaps equally unsurprisingly, the dispute has resulted in recriminations, soul-searching and suspicions of sabotage and conspiracy in the press in both India and Pakistan.44 Then there is the impact of climate change, which according to recent research will cause the Urumqi Glacier No. 1 to lose some 80 per cent of its ice volume in the next three decades—which will have obvious implications for Central Asia as well as for western China, where this and other glaciers play an important role in providing water for rivers but also as standby resources in times of drought.45

Frankopan, Peter. The New Silk Roads (p. 37). Knopf Doubleday Publishing Group. Kindle Edition.

Riaz Haq said...

Motta’s, which started operations in 1986 as a single-floor store selling basic grocery items, now has three floors and has acquired two stores in DHA called The Mart by Motta’s. Diamond Superstore, which started in 1958 as a kiryana selling aata, has seven branches in Karachi, including one with a food court and a children’s play area; Naheed Supermarket (known for introducing pre-packaged masalas and pulses to the market) began as a 1,000-feet square outlet and Lahore’s Al-Fatah began operations in the 1940s (under the name Al-Hamra) and now has 23 branches. All the above believe they have barely scratched the surface of Pakistan’s modern retail sector.

https://aurora.dawn.com/news/1144173

A number of local modern trade stores, along with mid-sized and smaller general stores, have opened and/or expanded, especially following the launch of international modern trade (IMT) stores, such as Carrefour, Makro and Metro in the 2000s. According to Muhammad Ibrahim, Owner, Motta’s, once IMTs entered Pakistan, people realised that the grocery store business was not limited to a traditional general store experience; consumers could be offered more convenience and variety and the business was profitable and "cash-rich." Mohammad Sheikh, Director, Al-Fatah, adds that market expansion in the last couple of years has been “aggressive” especially during the pandemic. “If you are uncertain about how long the pandemic will last, the best business to invest in is groceries,” he says.

In 2020, Pakistan’s food and grocery retail market had total revenues worth $52.6 billion, representing a compound annual growth rate (CAGR) of 8.1% between 2016 and 2020, according to a report, Food and Grocery Retail in Pakistan. Although the market value of the modern retail sector cannot be adequately estimated due to the industry being largely undocumented, store owners agree that it has been expanding pre- and post-Covid-19.

“In the beginning, consumer needs were limited – people would shop at kiryanas or neighbourhood general stores – but now their expectations are changing. For example, as people become more aware of global cuisines, they want to prepare non-desi food, such as pastas and burgers at home and there is a rise in demand for those ingredients,” explains Sheikh. As a result, established stores like Al-Fatah, Diamond Superstore, Motta’s, Naheed Supermarket and many others have kept evolving by revamping their stores, opening more branches and investing in product variety to stay above the competition and meet consumer demand. Although 225 million Pakistanis have access to more than two million retail outlets, of which approximately 800,000 are grocery retail stores (kiryanas, kiosks, department stores, supermarkets and medical-cum-general stores), the ratio of grocery stores to the population is still not enough.

“Compared to our population, the number of operational stores is nothing – one to two percent maybe. We are at the infancy stage, so even if 1,000 stores like Naheed Supermarket open in Pakistan, there will still be room for growth”, says Munsub Abrar, Director, Naheed Supermarket.

Although investing in the grocery retail business remains an attractive proposition, what are the intricacies involved in opening and maintaining an LMT store and how sustainable is the business for new players?

1 Investment
It can cost between Rs 20 to 30 million (small, basic stores) to Rs 80 to 100 million (large-scale stores) to open a grocery store, depending on the size, type of furnishings used (fixtures, equipment, etc.) fixed costs (rent, salaries, etc.) and product inventory.

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Store owners agree that staying relevant is key and they must keep evolving, whether by expanding, investing in aesthetic changes to cater to the changing customer shopping experience or offering incentives, such as loyalty cards and working with brands on special discounts. Sheikh emphasises that their most loyal customers are the older generation but they need to cater to the new generation by keeping up with what they want.

Riaz Haq said...

Retail sector contributes to 18% of Pakistan’s GDP: Razzak Dawood


https://mettisglobal.news/retail-sector-contributes-to-18-of-pakistans-gdp-razzak-dawood/


March 10, 2022 (MLN): Pakistan’s retail sector contributes 18% of the GDP, employ 16% of the workforce, said Razzak Dawood Commerce Adviser Razzak Dawood in 1st Future of Retail Business Summit (FOR2022) jointly hosted by Terrabiz Conferences and Chain stores Association of Pakistan (CAP) in Karachi on Wednesday.

A central objective of the Summit was to bring Pakistan’s diverse retail sector onto one cohesive platform.

The adviser said that the retail sector was critical to fueling supporting sectors such as construction and transportation. He further stated that the growth of the retail sector was a strong indicator of development and progress in the country.

Industry stalwarts used the platform of cross-sector key stakeholders to identify areas where collaboration could be made and improvements could benefit growth. The aggregate representation of business and technology allowed participants to envision how they could create the future of their retail brands and be part of this accelerating ecosystem. Retail legends such as Seema Irfan, founder of Bareeze and Founder of Al Fatah stores, Irfan Shaikh shared insights into the challenges they faced in building brands and serving customers in Pakistan.

An underlying theme that was highlighted in addition to the future of retail, is how resilient brands survived the challenges of the pandemic and became more customer-centric upon their reopening. The conference was supported by Pakistan Fintech Association, P@SHA and A.F. Fergusson & Co. As Knowledge Partners.

The sessions were chaired by august speakers such as Steve Dennis (Amazon Bestselling Author); Nadeem Hussain (PFN), Amir Paracha (Unilever); Saira Awan Malik (TCS); Faisal Riaz (Dolmen Mall); Seema Aziz (Sefam;); Shamoon Sultan (Khaadi), Ehsan Saya (Daraz), Ibad Ahmed (PandaMart), Guest of Honor M. Azfar Ahsan (Board of Investment) among the many industry leaders from retail, brands, e-commerce, fintech and taxation. In a special video address at the summit, Commerce Adviser Razzak Dawood expressed his appreciation for the conference and how the event would play a critical role in shaping the future of retail in Pakistan.

Riaz Haq said...

Ad revenue in Pakistan


https://aurora.dawn.com/news/1144596#:~:text=OOH%20ad%20revenue%20increased%20by,Rs%200.07%20billion%20(5%25).


Total Ad Revenue Rs. 88.73 billion in 2021-22

Total ad spend (revenue) has increased by Rs 13.09 (17%); in FY 2020-21, it increased by 17.04 (29%).


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In FY 2020-21, the combined revenues of Facebook, Google and YouTube accounted for 85% of the total ad spend on digital; this year, they account for 87%.

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TV ad revenue increased by Rs 4.64 billion (14%).
Digital ad revenue increased by Rs 3.15 billion (19%).
Print ad revenue increased by Rs 0.21 billion (2%).
OOH ad revenue increased by Rs 3.7 billion (44%).
Brand Activation/POP ad revenue increased by Rs 1.26 billion (50%).
Radio ad revenue increased by Rs 0.07 billion (5%).
Cinema ad revenue increased by Rs 0.06 billion (60%).

TV percentage share decreased by 1.4.
Digital percentage share increased by 0.27.
Print percentage share decreased by 2.19.
OOH percentage share increased by 2.51.
Brand Activation/POP percentage share increased by 0.93.
Radio percentage share decreased by 0.17.
Cinema percentage share increased by 0.05.

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TV percentage share decreased by 1.4.
Digital percentage share increased by 0.27.
Print percentage share decreased by 2.19.
OOH percentage share increased by 2.51.
Brand Activation/POP percentage share increased by 0.93.
Radio percentage share decreased by 0.17.
Cinema percentage share increased by 0.05.

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Compared to FY 2020-21, the rankings of the Top Three newspapers remain the same.
Most newspapers have registered slight increases in their revenues.

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Compared to FY 2020-21, the Top Five channels have retained their positions.
In FY 2020-21, Radio Awaz Network was #7; this year it is #9.
In FY 2020-21, FM 105 was #9; this year it is #7.

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Compared to FY 2020-21, the rankings of the Top Seven channels remain unchanged.
In FY 2020-21, PTV Home was #8 and Samaa was #9. This year, their positions are inverted.
In FY 2020-21, PTV Sports was #14. This year, it is #10.


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In FY 2020-21, the combined revenues of Facebook, Google and YouTube accounted for 85% of the total ad spend on digital; this year, they account for 87%.

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Compared to FY 2020-21, the rankings of Lahore (#1), Karachi (#2) and Hyderabad (#8) remain the same.
In FY 2020-21, Rawalpindi, Faisalabad, Gujranwala, Islamabad and Multan were #3, #4, #5, #6 and #7, respectively. This year, they are #4, #5, #7, #3 and #6.

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Product categories that were introduced this year are Real Estate (#1) and Retail/Online (#5).
In FY 2020-21, Beverages, FMCGs and Telecoms were #1, #2 and #3, respectively. This year they are #2, #3 and #4.
In FY 2020-21, Fashion and Electronic Appliances were #4 and #5 respectively. This year, they are #6 and #7.

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Compared to FY 2020-21, the rankings of all the elements remain the same.

Riaz Haq said...

TV Viewership Trends
FY 2021-22

https://aurora.dawn.com/news/1144667/tv-vieweship-trends-fy-2022-23

Compared to the previous fiscal year, the average number of viewership hours decreased by 14%.

Viewership ranges between 3.3 and 2.7 hours a day; it is highest in Karachi (3.3 hours) and lowest in Non-Metro Punjab and Urban Balochistan (2.7 hours).

Compared to the previous fiscal year, viewership has decreased across Pakistan, except in Non-Metro Sindh.


Entertainment channels (40%), unmatched channels (26%), and news channels (19%) have the highest market share. Last year, unmatched channels had the highest share (40%), followed by entertainment channels (36%) and news channels (14%), respectively.

All Genres:

Viewership has decreased among all SECs:
SEC A: Viewership has decreased by 13%.
SEC B: Viewership has decreased by 12%.
SEC C: Viewership has decreased by 9%.
SEC D: Viewership has decreased by 15%.
SEC E: Viewership has decreased by 19%.
Viewership is highest in SEC E; this was the case last year.

Entertainment Channels:

Viewership has increased or decreased among most SECs:
SEC A: Viewership has increased by 2%.
SEC B: Viewership has decreased by 3%.
SEC C: Viewership has increased by 1%.
SEC D: Viewership has decreased by 9%.
SEC E: Viewership has decreased by 9%.
Viewership is highest in SEC C; last year it was highest in SEC E.

Unmatched Channels:

Viewership has decreased among all SECs:
SEC A: Viewership has decreased by 49%.
SEC B: Viewership has decreased by 47%.
SEC C: Viewership has decreased by 38%.
SEC D: Viewership has decreased by 45%.
SEC E: Viewership has decreased by 41%.
Viewership is highest in SEC E; this was the case last year.

News Channels:

Viewership has increased among all SECs:
SEC A: Viewership has increased by 15%.
SEC B: Viewership has increased by 17%.
SEC C: Viewership has increased by 17%.
SEC D: Viewership has increased by 35%.
SEC E: Viewership has increased by 11%.
Viewership is highest in SEC B; this was the case last year.

Children's channels:

Viewership has increased or stayed the same among most SECs:
SEC A: No change
SEC B: No change
SEC C: Viewership has increased by 22%
SEC D: Viewership has increased by 12%
SEC E: Viewership has decreased by 8%
Viewership is highest in SEC E; this was the case last year.

Sports Channels:


l Viewership has increased among all SECs:
SEC A: Viewership has increased by 167%.
SEC B: Viewership has increased by 120%.
SEC C: Viewership has increased by 100%.
SEC D: Viewership has increased by 150%.
SEC E: Viewership has increased by 125%.
l Viewership is highest in SEC B; last year it was the highest in
SECs B and C.


Movie Channels:


Viewership has stayed the same among most SECs:
SEC A: No change.
SEC B: No change.
SEC C: No change.
SEC D: No change.
SEC E: Viewership has decreased by 33%.
Viewership is highest in SECs B, C, D and E; last year it was the highest in SEC E.


Regional Channels:

Viewership has decreased or stayed the same among all SECs:
SEC A: No change.
SEC B: Viewership has decreased by 50%.
SEC C: No change.
SEC D: Viewership has decreased by 50%.
SEC E: No change.
Viewership is highest in SEC E; Last year, it was the highest
in SECs C, D and E.


Cooking Channels:

Viewership has stayed the same compared to the previous year.


Music Channels:

Viewership has decreased or stayed the same among
most SECs:
SEC A: Viewership has decreased by 33%.
SEC B: No change.
SEC C: No change.
SEC D: Viewership has decreased by 50%.
SEC E: No change.
Viewership is highest in SEC A; this was the case last year.


Religious Channels:

Viewership has decreased in all SECs by 100%.

NB:

Figures in this section are based on data collected from Medialogic’s Hybrid Panel which covers 100+ cities and towns and 3,000+ reported households.

Cable penetration in Pakistan’s urban areas stands at 97%.

The data is primarily based on urban regions in Pakistan, and the target audience is limited to C&S individuals only

Numbers have been rounded up in certain instances.*

Riaz Haq said...

Faseeh Mangi
@FaseehMangi
Coca Cola has seen 13% volume growth in Pakistan despite ongoing macro challenges and sky-high inflation during the first quarter

https://twitter.com/FaseehMangi/status/1680929715962675205?s=20